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@Sven As a german engineer with a lot of friends in automotives, I honestly think the risk/reward for VW is straight up insane to take on. Battery technology, autonomous driving, delivery chains, we are basically behind on all fronts except for maybe quality. External factors like energy and production costs combined with hudge overhead in personnel will hurt for a long time. There is just no fantasy in those companys anymore. Yes it could turn out a great valueinvestment if debt doesnt fuck it up and the Rivian partnership somehow bare fruit (VW had 10 % of Tesla once), buuut the risk of holding this mediocre company in your portfolio with a risky debt profile and influencial state ownership is just not worth it.
Totally agree with you my friend. There's two much debt on all German carmakers, they need too many years of free cash flow just to pay off their debt and the return on capital employed will not be great as they have stayed behind. German quality used to be impecable, I owned a VW Polo for years and I remember driving downhill in a snaky road in mountainous Greece without touching the breaks, the car had excellent weighing among other things. Imho VW is overvalued at the moment, we are definitely not at the bottom of the cycle yet. But if I wanted to invest in a German manufacturer I would go with Mercedes. But definitely not now.
If you just surface level analysis this is what you come up with. Most VOW3 debt is owed to itself because of financing wing of VOW3. Debt is not a problem. The problem is Govt control and labour unions which are making any change difficult,
I don‘t see the debt as a big issue. The automotive part of the company currently has over 30 billion in net cash. The huge net debt is because of vw fiancial services, which makes money on financing and leasing out the cars. Of course there are still big risks with VW, but the debt is none of that.
that debt has the personal loans/cars as collateral. the debt is not for the car company, is for the financial arm. debt is not that important for banks and vw has an internal bank on their balance sheet.
@@marjanpavlovski most of VW debt, or liabilities are fully covered by their assets - for example they borrow money (debt), create car (asset) and sell it to customer even if he doesn't have money - because VW do lease-lending these cars. So they have big debt, but is covered by lease-lending contracts, something like that. Sorry for my english 🙂
Sven, the debt situation with Volkswagen is a different story. Volkswagen isn’t compelled to take on new debt; instead, it strategically shifts consumer-financed car loans into immediate cash flow through debt issuance. Essentially, it's a financial trade: the consumer finances their car at, say, 5%, while Volkswagen issues debt at a lower interest rate, securing immediate liquidity. This approach allows Volkswagen to optimize cash flow and leverage cost differentials effectively.
Buy when they cut or cancel the dividend. My guess is this will be the bottom. 😋😋 Also Sven, you live near Austria, you should know Volkswagen is pronounced Folkswagen. What I also find interesting is that dividend yield of Mercedes and VW are almost the same right now (10% vs. 11%) even though the likelihood of Mercedes keep paying that dividend is way, way higher than that of VW.
The most of the financial liabilities shown are from the financing area of the company are credits to car purchases and are supported by the payables of the credits. So if you isolate that, the debt is not high at all.
that is correct, but it is the whole financing model where the company finances your purchase thanks to low rates - what happens when the rates turn, also much more difficult to sell - it is a game of financial engineering, and once you start playing it, there is no going back.
@@Value-Investing with your logic USA should bankrupt every moment... but it is not happen, of course if there would be some urgent need for more money, they just create more of them, same can be applied to VW and german central bank or ECB - this crisis is mostly political matter (big ambitions in climate goals combined with almost 3 year effort to defeat RF)
Hi Sven, what do you think of Volvo car? it seems like a niche where the chinese competition is less severe, the company is going froward with EVs in market where they still sell a lot (Scandinavian mostly). Even with a lot of cash as a shield against downside. Is it possible that they are falling with the rest of the sector but there's value there?
They are valued low because they invest at the moment all the available cash flow to a factory in Belgium to bring the best seller EX30 production to EU, so free cashflow looks terrible. Controlling ownership is Chinese (one reason for low p/e). They have stopped investing in to Polestar. I have a position both in Volvo and VW. Stellantis also looks cheap right now, but they are strugling with sales. The problem Volvo doesn't have. Volvo will most likely lose money or EX30 market share in EU 2025-2026 as the EU tariffs are in effect.
Hi, When are you going to do a detailed analysis of Banco Millennium BCP BCP-LS? By my analysis the share has a potential for rising greater than 80% by 2027, do you agree with me?
Sven in upscale areas of California people are buying teslas. In Asia the Chinese electric cars are taking over. That’s why car manufacturers are suffering and will continue to suffer
Hello Sven! Long time follower of your channel here! Always enjoy watching and seeing your ideas and approach! Since you’ve some vids on car manufacturers from EU, could maybe cover sometime in the future Renault and Volvo Car or Volvo Trucks? Could be interesting and then Even an overall talk on the car sector as a whole. Cheers! Vlad
Remember that Volkswagen is not only Volkswagen brand. They have ALOT of brands that they can potentially sell. Lamborghini is also part of Volkswagen, Porsche like you mentioned. I would love if you could make an overview video of all the brands that make up Volkswagen as a company. People investing in Volkswagen might think they are just buying 1 car brand, but that is not true.
Speaking of VW and its brands, if things continue as bad as they have, I don't think it takes long for the brands to be the property of a Chinese company. And risk is not only on VW but every car brand. Volvo cars was an early example.
The Group comprises ten brands from five European countries: Volkswagen, Volkswagen Commercial Vehicles, ŠKODA, SEAT, CUPRA, Audi, Lamborghini, Bentley, Porsche and Ducati.... it's not just a vow
Thank you, Sven. Have you had a look at Subaru? Seems to have a much better balance sheet and it’s also very cheap. Also no exposure to China as it’s mostly doing business in USA and Japan.
Don’t forget that Volkswagen owns the 75% of Porsche AG. And even at the depressed market cap that Porsche has right now, this interest is equivalent to 18 or 19 Billion. Almost half of the capitalization of Volkswagen.
Good points in the video. Thanks! TL;DR In my opinion, don't invest in car companies -- except perhaps in the ultra luxury variety. The Chinese cars are finally coming for the global masses. But, after some years another country probably gets as mad and challenges China, presses down prices, and perhaps takes China's lead... My point: modern automotive industry (especially the cheap mass-produced variety) is (and will be) heavily government subsidized. The required borrowing, investment and capital allocation is too massive, and the long-term return on investment is too low to make sense. The industry stands on an inorganic ground. I think the only sensible stage to invest in a general automotive company is during a country's industry buildup, for example BYD at the time Berkshire and Li Lu got in.
It'll be interesting to look at the merger between Amcor and Berry. I don't see it discussed much. Berry shareholders get 7.25 shares of Amcor upon completion, so a bit of a discount from current price.
Yesterday, I checked the automotive industry. I was convinced by stellantis, slow growth. FCF also looks great and has better yields than volks. The FCF story and especially the capex is more, which are much smaller convinces me, especially for the current price + buyback
Sven, Volkswagen has 255 billions debt much higher than their cash. Don't you think Stellantis is better positioned with healthier balance sheet. Same level of cash and debt. What do you think? Thanks
Brilliant analysis. I was considering VW but saw a negative cash flow trend in its financials due to high debt, so I decided to wait. Your take only confirms my concerns. Thank you!
I feel like it's unfair to emphasize the risks of Brookfield in a focused capacity but then underrepresented the risks of investing in Volkswagen in their own targeted risk profile. Feels like "if it's cheap, it's not risky. And if it is not cheap it's risky" whereas a value investor arguably recognizes risk is not equal to how cheap it is.
I love VW but I actually found the most value in BMW, But the only problem lies is that VW is better equipped for the future with EVs compared to BMW. If we do continue to go that way….
I see vow as an investment in Germany, so if vow went bankrupt, then the lights could be turned off in Germany. I conclude that money will be printed anyway, or Germany will go bankrupt. Therefore, with uncontrolled money printing, vow can also x3.
Ok isnt it hilarious that this guy does so much analysis on so many companies, reads many books and does many others things yet ha cannot beat the return of the indexes? These videos are good to have fun not so much for investing advice. But I guess he makes more profit from making these videos rather than the actual stocks. :)
Why do I feel I am playing Monopoly as a child back in the 1960's? Why does this feel like we are playing with fake money, IOUs, buying and flipping houses like Monopoly, just playing a game? Why does it feel that way? Is this an IOU problem? How long can we sell unborn children and immigrants into unlimited infinite IOU income tax debt slavery? Thanks Sven.
the Bundesland Niedersachsen (where Wolfsburg is) owns a part of Volkswagen, NOT the german government ;) Niedersachsen is now big, but not exactly in financial terms, so I doubt they can hold the weight of VW alone. Many german taxpayers are already unhappy, that VW is too expensive for the “Volk” and it already received lots of political backing from the government. Over ten years ago, when BMW launched the I3 and I7? they tried to move the other car companies and german government to a EV transition, but was laughed at by VW which always changed laws on EU bases as they wanted….They even built a production facility in the Uighur region, when even the german government said they will not back up the risks, as they usually do. All their fault for this mess and for relying so much on the money from china, while doing all the tech-transfer forced by China! (China didn’t get so good by itself, but by the forced cooperation of Chinese and foreign companies) So I have my doubts the taxpayer see it as necessary to prevent VW from reforming itself on taxpayers money. There is now a transition time, where the overly well paid older VW workers in Wolfsburg will slowly have to cut their losses and let VW let them go for lots of money (many of them still have some small farms they can keep alive with that money ;). After that VW can concentrate on pushing Tesla back with Rivian technology. They would need to help at the same time battery companies like Northvolt to survive to not rely on Chinese batteries…
Super a buon mercato ma causa transizione ecologica e/o produzione / tecnologica non si vede una via facile per uscire dall'impasse è un settore che rischia grosso (in Europa ) A livello di capacità produttiva la Cina a scassato gli equilibri in termini di auto prodotte e vendute a livello mondiale , per l'elettrico puro è direi già dominante, per l'endotermico e l'ibrido forse si può fare ancora qualcosa , ma la riconversione sarà molto dura. Super cheap but due to ecological and/or production/technological transition we don't see an easy way out of the impasse it's a sector at great risk (in Europe) In terms of production capacity China has upset the balance in terms of cars produced and sold worldwide, for pure electric it is already dominant, for endothermic and hybrid perhaps something still can be done, but the reconversion will be very difficult.
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The fact that they're able to close their German plants is huge though, since those have never been profitable, the only reason they're still open is that the government shareholders wouldn't allow closing them. Being rid of those provides a much stronger base to grow from if they survive. That said, in electric I don't think any company can ever compete with BYD on price, except in countries that put up ridiculous tariffs. If EV transition carries on, the best they can hope for is the Rivian bet succeeding and them seeing greater success in the US, and in Europe as the economy improves, while completely losing the rest of the world. If EV transition reverses, which might happen if subsidies get cut by increasingly right-wing governments, then it might be a different story, but there is still the threat of them going bankrupt before they can take advantage.
5000 ? per produced car? its very expensive. Chinese cars are selling at 3000$. VW should shut down and return all the money to shareholders and bond holders.
So much negativity about VW. When stock is moving up, everyone forgets about debts and other problems. When it's moving down - everyone is a hater. Same with almost any other stock. I love to take VW cars via local car sharing and those cars are one of my favorite. Id3 and id4 are wonderful, pleasure to drive, even not expensive e-up is wonderful to get from a to b in the city. Not seeing why aren't they competitive in EV market. I have tried many EVs and VW is doing great. One thing I don't like is just their media system.
I dont know much about stock prices, but i do know Europe is not transitioning from ICE any time soon. Lithium batteries no matter what everyone will tell you are fundamentaly inneffiecent as are all chemic storage batteries. Most of european power comes from fossil fuels, charging stations are not at capacity required, people in cities wont really have an option for it anyway, wattage transfer of infrastructure is no way close to what we need. If europe is serious about green transition it would invest in nuclear power and extensive public transportation instead of this EV crap. Not to mention EV seems to be unreliable in cold conditions, my coworkers Tesla didnt start this morning due to cold, so he took his wifes VW Passat. I wonder how many issues will they have in China with this massive EV adoption, they should stick to public transport, it makes a lot more sense. Also i think most people dont realise exactly what would the fall of European automakers in a short term create. It employs millions on the continent, each car requires thousands of parts, manufactured around Europe. We could see a real recession maybe even a lot worse with the domino effect. When germans stop making cars for the people they make tanks.
I think VW is too big and too important for Germany to fail. Actually not only for Germany, but for a big part of the EU (suppliers etc.). They will be bailed out if needed...
Very interesting how a lot of users (bots) with names in Russian alphabet are commenting about energy 🤭 almost like they have a mission for the western world
Porsche (P911) Market Cap is not 28B! It is around 53B! So 85% of Volkswagen Market Cap + Lamborghini could be worth 20B-30B if you do the Math. + Net Cash of around 20-30B. Why should they go bankrupt with this Balance Sheet and Assets?
@@Value-Investing The big part of the "Debt" is related to their "Bank" which is the leasing Business etc, that's not really Debt. They have the collateral of the cars + claims on the income of the debtors. The interest-bearing portion of debt amounted to €92.3 in 2023. That's why we have the Automotive net cash.
You need to consider that the majority of their debt is tied to the financial services side of the company, essentially banking. You obviously wouldn't analyze a bank's balance sheet the same way as an automotive manufacturer.
It is what they deserve! They went for DEI, electric cars and other BS and now they are paying the price of the decisions they made. If you want to buy a GT3 RS or a GT4 RS you cannot because they sell those in small numbers and only to a few customers... because of green BS. I will not buy their EV.
Wow make cheep cars, take advantage of customers LIKE ME and go broke VW. I owned a 2013 VW Jetta hybrid. WORST car I ever owned, dead at 104k miles, not worth fixing. I only buy Toyota and Honda now. They are not to be trusted. I mean... who started VW anyway?
Alibaba just keeps reshaping, restructuring, reshuffling while barely growing... it is pathetic. If it is so undervalued, why not use all the cash available to do serious repurchases today, back near 80, instead of issuing debt, convertible notes and restructuring every other quarter? You keep talking about potential lost decades and 50% crashes in the US... this thing already crashed more than 70% and has remained crashed for 3 years already, for real, not potentially. And what lies ahead? Deflation, never-ending crisis, Trump trade wars...
Folding International commerce into the domestic ecommerce unit won't help transparent reporting for sure. Domestic commerce is stangnant yet extremely profitable. International commerce is growing fast but still unprofitable. Looks like a make-up operation.
They issue bonds to get offshore cash to buy back the shares. They can't use most of the onshore cash for share repurchases. So them issuing these bonds is actually good. BABA surged during the first Trump tenure. Tariffs can help BABA. Currently Xi doesn't have to stimulate the economy as the huge exports still give him the 5% GDP growth he is aming for. If tariffs hit Xi will stimulate internally and that is when BABA can take off. Also BABA's exports are very low. Why should they be hit by the tariffs.
@@RoTelnCheese for sure not. Volkswagen had several crises in the past, and they did overcome all of them. Key point will be to reduce the labor cost, and that will happen, the one way, or the other. Cars are still good, look at Audi, Porsche, Skoda ... or Lamborghini. It is ridicolous that Ferrari sells 13700 cars in 2023 and is worth 80 billion Euros, while VW with selling 10 mio cars and owning Lamborghini (selling 10k cars in 2023) and much more is worth half of Ferrari. But main point is that german state will not allow Volkswagen to go bankrupt. because everybody knows that this will be the end of german "Wohlstand" (prosperity), and nobody (except the greens) wants that ... Also they are doing their homework concerning EV related stuff ...please don´t tell me that german engineers are not capable of doing the same what the chinese are doing ... I am from Germany and I know that - if necessary - things are being done here - no matter what the capital market - momentarily - believes in. And by the way: interest rates will go down (ECB), that will help Volkswagen refinancing their debt.
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You have been absolutely spoiling us lately Sven. We appreciate your time spent + teachings. Thanks
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EU/Germany has totally bungled their energy policy.
Still the NPC workers are protesting in front of Volkswagen, instead against the government.
@@ИвайлоСтоянов-б3м NPCs won't do that much against the government, they should annoy VW and VW annoys the government better than any protest.
EU? Other EU countries' energy situation is fine
@@RadioNul Others didn't closed their nuclear plants, so it's a bit better.
Volkswagen has production facilities all over the world.
@Sven As a german engineer with a lot of friends in automotives, I honestly think the risk/reward for VW is straight up insane to take on. Battery technology, autonomous driving, delivery chains, we are basically behind on all fronts except for maybe quality. External factors like energy and production costs combined with hudge overhead in personnel will hurt for a long time. There is just no fantasy in those companys anymore. Yes it could turn out a great valueinvestment if debt doesnt fuck it up and the Rivian partnership somehow bare fruit (VW had 10 % of Tesla once), buuut the risk of holding this mediocre company in your portfolio with a risky debt profile and influencial state ownership is just not worth it.
agree!
Totally agree with you my friend. There's two much debt on all German carmakers, they need too many years of free cash flow just to pay off their debt and the return on capital employed will not be great as they have stayed behind. German quality used to be impecable, I owned a VW Polo for years and I remember driving downhill in a snaky road in mountainous Greece without touching the breaks, the car had excellent weighing among other things. Imho VW is overvalued at the moment, we are definitely not at the bottom of the cycle yet. But if I wanted to invest in a German manufacturer I would go with Mercedes. But definitely not now.
I had a VW Polo and the quality was trash. Only bought Japanese since then.
If you just surface level analysis this is what you come up with. Most VOW3 debt is owed to itself because of financing wing of VOW3. Debt is not a problem. The problem is Govt control and labour unions which are making any change difficult,
@@RadioNul yes it’s not there anymore, I had it twenty years ago
I don‘t see the debt as a big issue. The automotive part of the company currently has over 30 billion in net cash. The huge net debt is because of vw fiancial services, which makes money on financing and leasing out the cars. Of course there are still big risks with VW, but the debt is none of that.
Debt is an issue if your plant, equipment and designs produce cars that people do not want anymore. Would be very careful.
Hey Sven! What do you think about PBR (PetroBras)?
The PE ratio of Volkswagen perfectly reflects the general mood of industry in Germany.
Hi Sven, the market cap might be 45B, but the enterprise value (including their debt) is 272B, then its a different calculation
yes, but I don't get much of their debt :-))
@@Value-Investing ?
that debt has the personal loans/cars as collateral. the debt is not for the car company, is for the financial arm. debt is not that important for banks and vw has an internal bank on their balance sheet.
@@joaosobraldossantos explain this to me to like a 4 year old
@@marjanpavlovski most of VW debt, or liabilities are fully covered by their assets - for example they borrow money (debt), create car (asset) and sell it to customer even if he doesn't have money - because VW do lease-lending these cars.
So they have big debt, but is covered by lease-lending contracts, something like that. Sorry for my english 🙂
Sven, the debt situation with Volkswagen is a different story. Volkswagen isn’t compelled to take on new debt; instead, it strategically shifts consumer-financed car loans into immediate cash flow through debt issuance. Essentially, it's a financial trade: the consumer finances their car at, say, 5%, while Volkswagen issues debt at a lower interest rate, securing immediate liquidity. This approach allows Volkswagen to optimize cash flow and leverage cost differentials effectively.
yes, I understand that, but when the markets close for whatever reason, so does the company's ability to sell cars, while most of the debt remains
I like vw audi group. They have good cars, and a good distribution network worldwide.
Buy when they cut or cancel the dividend. My guess is this will be the bottom. 😋😋 Also Sven, you live near Austria, you should know Volkswagen is pronounced Folkswagen. What I also find interesting is that dividend yield of Mercedes and VW are almost the same right now (10% vs. 11%) even though the likelihood of Mercedes keep paying that dividend is way, way higher than that of VW.
Begins with a "v" when speaking 'Merican. 💁
@@Pizza-gb1chAmericans can't even speak Einstein or Zuckerberg correctly :-)
Thanks, the best channel for investing ;)
thanks!
The most of the financial liabilities shown are from the financing area of the company are credits to car purchases and are supported by the payables of the credits. So if you isolate that, the debt is not high at all.
that is correct, but it is the whole financing model where the company finances your purchase thanks to low rates - what happens when the rates turn, also much more difficult to sell - it is a game of financial engineering, and once you start playing it, there is no going back.
@@Value-Investing with your logic USA should bankrupt every moment... but it is not happen, of course
if there would be some urgent need for more money, they just create more of them, same can be applied to VW and german central bank or ECB - this crisis is mostly political matter (big ambitions in climate goals combined with almost 3 year effort to defeat RF)
rates in Europe will keep on going down.
What is their profit on each car?
5k sounds cheap per unit, but the flip side is the net profit.
Thanks @Sven for the great overview, I am wonder if we could consider Volkswagen a Peter Lynch's asset play, would you agree? Thanks for the comments!
Hi Sven! great videos thank you ! any ideas/video on air taxis as long term ??
For an accurate representation of value, you should add the debt to the market cap when calculating p/e ratio. It is still cheap though.
Hi Sven, what do you think of Volvo car? it seems like a niche where the chinese competition is less severe, the company is going froward with EVs in market where they still sell a lot (Scandinavian mostly). Even with a lot of cash as a shield against downside. Is it possible that they are falling with the rest of the sector but there's value there?
They are a chinese owned company (geely or so) with polar star. They are now the chinese competition ;)
They are valued low because they invest at the moment all the available cash flow to a factory in Belgium to bring the best seller EX30 production to EU, so free cashflow looks terrible. Controlling ownership is Chinese (one reason for low p/e). They have stopped investing in to Polestar. I have a position both in Volvo and VW. Stellantis also looks cheap right now, but they are strugling with sales. The problem Volvo doesn't have. Volvo will most likely lose money or EX30 market share in EU 2025-2026 as the EU tariffs are in effect.
Hi, When are you going to do a detailed analysis of Banco Millennium BCP BCP-LS? By my analysis the share has a potential for rising greater than 80% by 2027, do you agree with me?
Sven in upscale areas of California people are buying teslas. In Asia the Chinese electric cars are taking over. That’s why car manufacturers are suffering and will continue to suffer
thanks for sharing!
Thank you Sven. Is it the same ticker of VWAGY? Another one is VLKPF. Which one is it?
Hello Sven! Long time follower of your channel here! Always enjoy watching and seeing your ideas and approach! Since you’ve some vids on car manufacturers from EU, could maybe cover sometime in the future Renault and Volvo Car or Volvo Trucks? Could be interesting and then Even an overall talk on the car sector as a whole. Cheers! Vlad
Remember that Volkswagen is not only Volkswagen brand. They have ALOT of brands that they can potentially sell.
Lamborghini is also part of Volkswagen, Porsche like you mentioned.
I would love if you could make an overview video of all the brands that make up Volkswagen as a company.
People investing in Volkswagen might think they are just buying 1 car brand, but that is not true.
Speaking of VW and its brands, if things continue as bad as they have, I don't think it takes long for the brands to be the property of a Chinese company. And risk is not only on VW but every car brand. Volvo cars was an early example.
Thank you for the analysis, absolutely agree with you. Would be good to see where you put them at your risk/reward matrix though :)
it is a binary outcome, thus no way to put it in there, it is either a 2x or zero!
@@Value-Investingyou should do a Schrodinger's value matrix in addition to the regular one 😅
Sven, can we maybe talk about the difference between $PAH3 and $P911 as maybe there is confusion what is what and what is better etc?
The Group comprises ten brands from five European countries: Volkswagen, Volkswagen Commercial Vehicles, ŠKODA, SEAT, CUPRA, Audi, Lamborghini, Bentley, Porsche and Ducati.... it's not just a vow
Dear Sven, don’t you think that Bayer having the same problems looks better to buy?
last time I looked there wasn't much value...ua-cam.com/video/PvMJx3Z1nwQ/v-deo.html
Nice video, what do you think about Hyundai?
Thank you, Sven. Have you had a look at Subaru? Seems to have a much better balance sheet and it’s also very cheap. Also no exposure to China as it’s mostly doing business in USA and Japan.
we are still at a good time for carmakers, the ugly isn't there at all yet
What do u think about Orange SA stock?
Nice!
thanks for doing this!
:-)
What is your thoughts on Braskem $BAK (Petrochemicals)?
Don’t forget that Volkswagen owns the 75% of Porsche AG. And even at the depressed market cap that Porsche has right now, this interest is equivalent to 18 or 19 Billion. Almost half of the capitalization of Volkswagen.
He mentioned it
You just wrote what he said…
Good points in the video. Thanks! TL;DR In my opinion, don't invest in car companies -- except perhaps in the ultra luxury variety. The Chinese cars are finally coming for the global masses. But, after some years another country probably gets as mad and challenges China, presses down prices, and perhaps takes China's lead... My point: modern automotive industry (especially the cheap mass-produced variety) is (and will be) heavily government subsidized. The required borrowing, investment and capital allocation is too massive, and the long-term return on investment is too low to make sense. The industry stands on an inorganic ground. I think the only sensible stage to invest in a general automotive company is during a country's industry buildup, for example BYD at the time Berkshire and Li Lu got in.
It'll be interesting to look at the merger between Amcor and Berry. I don't see it discussed much. Berry shareholders get 7.25 shares of Amcor upon completion, so a bit of a discount from current price.
could it be an asset play scenario?. VOW3 has 75% of Porsche.Tangible PB ratio is about 0.35. In a bankrupcy scenario it seems you could win.
could be, it is getting close to value!
My hope of VW one day being competitive in the sedan market won’t happen 😢
Can u analyse Qorvo , thanks .
Yesterday, I checked the automotive industry. I was convinced by stellantis, slow growth. FCF also looks great and has better yields than volks. The FCF story and especially the capex is more, which are much smaller convinces me, especially for the current price + buyback
Sven, Volkswagen has 255 billions debt much higher than their cash. Don't you think Stellantis is better positioned with healthier balance sheet. Same level of cash and debt. What do you think? Thanks
will have to check!
Stellantis sales are down now. If you think it's going back up and EV:s are the future, then it might be good time to buy Stellantis now.
9:20 love that outlook. Yes. I can see Porsche own by some Chinese firm soon
Mamma mia! 🙏🏻😢
Hi sven
Can you do a review on lotus bakeries.. its an amazing company
to short it?
@Value-Investing no.. i know it looks incredibly expensive but it has an amazing moat named biscoff.. i would like to know when to buy
Brilliant analysis. I was considering VW but saw a negative cash flow trend in its financials due to high debt, so I decided to wait. Your take only confirms my concerns. Thank you!
I feel like it's unfair to emphasize the risks of Brookfield in a focused capacity but then underrepresented the risks of investing in Volkswagen in their own targeted risk profile. Feels like "if it's cheap, it's not risky. And if it is not cheap it's risky" whereas a value investor arguably recognizes risk is not equal to how cheap it is.
Hm, didnt i say volskwagen can be bailed out by government? That is a risk of permanent capital loss
why no risk/reward chart this time ?
good question, it is a binary bet here!
I love VW but I actually found the most value in BMW, But the only problem lies is that VW is better equipped for the future with EVs compared to BMW. If we do continue to go that way….
How about Porsche Vz Stock?
it is all connected in a way, some might have a more margin of safety, some less, but I didn't dig deper
so better is BYD ?
ez buy will get bottom like for others stocks it's posible that it';s bottom but i will dca if it go down more.
thanks for sharing!
I see vow as an investment in Germany, so if vow went bankrupt, then the lights could be turned off in Germany. I conclude that money will be printed anyway, or Germany will go bankrupt. Therefore, with uncontrolled money printing, vow can also x3.
Ok isnt it hilarious that this guy does so much analysis on so many companies, reads many books and does many others things yet ha cannot beat the return of the indexes? These videos are good to have fun not so much for investing advice. But I guess he makes more profit from making these videos rather than the actual stocks. :)
Sven does his own kind of investing, thanks for commenting!
Wonder how you know he hasn’t beat the market? I think he’s doing just fine with less risk.
Austrias economy is currently very bad.... see Mayr-Melnhof stock. 🤔
What about Bayer please?
ah, I see it is just going lower but still we don't know what the value is: ua-cam.com/video/PvMJx3Z1nwQ/v-deo.html
BAYN is cigar butt investing. Picking up a bad business at rock bottom price and hope for a 50% up hiccup so you can unload.
EVs are coming, and VW is struggling. buy deep cheap? -that’s not a question. Does anyone still remember Nokia?
:-)
When you go deep enough there is value there. Nokia is up from below 3€ to 4,3€ in the last year 😂
Why do I feel I am playing Monopoly as a child back in the 1960's? Why does this feel like we are playing with fake money, IOUs, buying and flipping houses like Monopoly, just playing a game? Why does it feel that way? Is this an IOU problem? How long can we sell unborn children and immigrants into unlimited infinite IOU income tax debt slavery? Thanks Sven.
Can you take a look over Indonesian Stock like Telkom Indonesia plz?
thanks for suggesting!
Risk - reward ratio seems to hinge mostly on if INFLATION resurges in a world where nearly every economy is fiscally bankrupt.
Good one!
I don’t like investing in companies with high debt burdens, too much risk associated with the lack of future flexibility
vw keep producing expensive and unreliable cars. Why do they sink?
:-)
the Bundesland Niedersachsen (where Wolfsburg is) owns a part of Volkswagen, NOT the german government ;) Niedersachsen is now big, but not exactly in financial terms, so I doubt they can hold the weight of VW alone.
Many german taxpayers are already unhappy, that VW is too expensive for the “Volk” and it already received lots of political backing from the government. Over ten years ago, when BMW launched the I3 and I7? they tried to move the other car companies and german government to a EV transition, but was laughed at by VW which always changed laws on EU bases as they wanted….They even built a production facility in the Uighur region, when even the german government said they will not back up the risks, as they usually do. All their fault for this mess and for relying so much on the money from china, while doing all the tech-transfer forced by China! (China didn’t get so good by itself, but by the forced cooperation of Chinese and foreign companies)
So I have my doubts the taxpayer see it as necessary to prevent VW from reforming itself on taxpayers money. There is now a transition time, where the overly well paid older VW workers in Wolfsburg will slowly have to cut their losses and let VW let them go for lots of money (many of them still have some small farms they can keep alive with that money ;). After that VW can concentrate on pushing Tesla back with Rivian technology. They would need to help at the same time battery companies like Northvolt to survive to not rely on Chinese batteries…
Btw, Porsche $P911’s market cap is 52 billions of euros at today’s stock price. More than VW’s market cap…
thanks for sharing!
Porsche holding owns Volkswagen and Volkswagen owns Porsche. It's quite funny.
Porsche Holdings (PHA3) is not the carmaker, and owns Volkswagen (VOW), Porsche (P911) and many other companies
Chinese Built MG and Rover comes to mind
Super a buon mercato ma causa transizione ecologica e/o produzione / tecnologica non si vede una via facile per uscire dall'impasse è un settore che rischia grosso (in Europa ) A livello di capacità produttiva la Cina a scassato gli equilibri in termini di auto prodotte e vendute a livello mondiale , per l'elettrico puro è direi già dominante, per l'endotermico e l'ibrido forse si può fare ancora qualcosa , ma la riconversione sarà molto dura.
Super cheap but due to ecological and/or production/technological transition we don't see an easy way out of the impasse it's a sector at great risk (in Europe) In terms of production capacity China has upset the balance in terms of cars produced and sold worldwide, for pure electric it is already dominant, for endothermic and hybrid perhaps something still can be done, but the reconversion will be very difficult.
is it capitualtion? just look at entreprise value and the chart will look very different....
the stock is, and we will see about the business.
The quality of the VW cars is also in the free fall. ... my feeling. 😱
I always had cars from the VW Group. This is over.
thanks for sharing!
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The fact that they're able to close their German plants is huge though, since those have never been profitable, the only reason they're still open is that the government shareholders wouldn't allow closing them. Being rid of those provides a much stronger base to grow from if they survive.
That said, in electric I don't think any company can ever compete with BYD on price, except in countries that put up ridiculous tariffs. If EV transition carries on, the best they can hope for is the Rivian bet succeeding and them seeing greater success in the US, and in Europe as the economy improves, while completely losing the rest of the world.
If EV transition reverses, which might happen if subsidies get cut by increasingly right-wing governments, then it might be a different story, but there is still the threat of them going bankrupt before they can take advantage.
Porsche and Lamborghini arejust the market cap of WV, the rest is free or just a liability.
yes, but can you sell the crown jewels, and then what, pay a dividend - workers will not like that, so....
5000 ? per produced car? its very expensive. Chinese cars are selling at 3000$. VW should shut down and return all the money to shareholders and bond holders.
So much negativity about VW. When stock is moving up, everyone forgets about debts and other problems. When it's moving down - everyone is a hater. Same with almost any other stock. I love to take VW cars via local car sharing and those cars are one of my favorite. Id3 and id4 are wonderful, pleasure to drive, even not expensive e-up is wonderful to get from a to b in the city. Not seeing why aren't they competitive in EV market. I have tried many EVs and VW is doing great. One thing I don't like is just their media system.
And the design is great! VW EVs look futuristic and very beautiful, at least for me.
I dont know much about stock prices, but i do know Europe is not transitioning from ICE any time soon. Lithium batteries no matter what everyone will tell you are fundamentaly inneffiecent as are all chemic storage batteries. Most of european power comes from fossil fuels, charging stations are not at capacity required, people in cities wont really have an option for it anyway, wattage transfer of infrastructure is no way close to what we need. If europe is serious about green transition it would invest in nuclear power and extensive public transportation instead of this EV crap. Not to mention EV seems to be unreliable in cold conditions, my coworkers Tesla didnt start this morning due to cold, so he took his wifes VW Passat. I wonder how many issues will they have in China with this massive EV adoption, they should stick to public transport, it makes a lot more sense.
Also i think most people dont realise exactly what would the fall of European automakers in a short term create. It employs millions on the continent, each car requires thousands of parts, manufactured around Europe. We could see a real recession maybe even a lot worse with the domino effect.
When germans stop making cars for the people they make tanks.
Porsche looks more attractive compared to VW however essentially they are same company.
Seems very risky and very political. If the government has to step in to save it, existing equity holders will take a hit.
€300B debt is just insane with anything other than 0% interest rate
it is partially covered by claims on customers but yes, low rate environment
I own vwagy and its been quite a dip
Hi, pronunciation is not correct. The begin is not v it is f.
danke!
Yes, it's "False Wagon"
I think VW is too big and too important for Germany to fail. Actually not only for Germany, but for a big part of the EU (suppliers etc.). They will be bailed out if needed...
Very interesting how a lot of users (bots) with names in Russian alphabet are commenting about energy 🤭 almost like they have a mission for the western world
Porsche (P911) Market Cap is not 28B! It is around 53B! So 85% of Volkswagen Market Cap + Lamborghini could be worth 20B-30B if you do the Math.
+ Net Cash of around 20-30B. Why should they go bankrupt with this Balance Sheet and Assets?
because of how big are the other things that can move in a $300 billion debt balance
Because their debt is 10 times the market cap
And assets most of which should be discounted are 1.5x of the debt. But current assets are a lot less.
@@Value-Investing The big part of the "Debt" is related to their "Bank" which is the leasing Business etc, that's not really Debt. They have the collateral of the cars + claims on the income of the debtors. The interest-bearing portion of debt amounted to €92.3 in 2023. That's why we have the Automotive net cash.
Politics matters...and nothing will get better with the current German Stasi
thanks for sharing!
You need to consider that the majority of their debt is tied to the financial services side of the company, essentially banking. You obviously wouldn't analyze a bank's balance sheet the same way as an automotive manufacturer.
I know, but then when you need to borrow 200 billion to sell your product and also finance your customer, you know, these risks pile up....
Never ever, ever never, invest in the auto industry.
It is what they deserve! They went for DEI, electric cars and other BS and now they are paying the price of the decisions they made. If you want to buy a GT3 RS or a GT4 RS you cannot because they sell those in small numbers and only to a few customers... because of green BS. I will not buy their EV.
thanks for sharing!
Hey Blue Eyes
hey!
The VW will also end soo. Absolutly nothing to Show for the Future
Volkswagen the new Nokia ?
DAX still all time highs
crazy!
Debt and Nobody wants an electric car or to spend £40k on a vw golf.
:-)
Kurzarbeitergeld 2025 incoming. Saying they're closing 3 plants, so the state comes to the rescue with tax money.
They are about to IPO Lamborghini
good for them!
@Value-Investing this is going to offer huge value to porsche holdings considering that a Lamborghini IPO may reach billions of dollars in market cap
Wow make cheep cars, take advantage of customers LIKE ME and go broke VW. I owned a 2013 VW Jetta hybrid. WORST car I ever owned, dead at 104k miles, not worth fixing. I only buy Toyota and Honda now. They are not to be trusted. I mean... who started VW anyway?
thanks for sharing!
BYD
Price to cash flow. Everything else is commentary
Just saw the latest Porshe advertisement commercials...totally woke. Stay away.
thanks for sharing!
Id rather have a chinese EV.
Alibaba just keeps reshaping, restructuring, reshuffling while barely growing... it is pathetic.
If it is so undervalued, why not use all the cash available to do serious repurchases today, back near 80, instead of issuing debt, convertible notes and restructuring every other quarter?
You keep talking about potential lost decades and 50% crashes in the US... this thing already crashed more than 70% and has remained crashed for 3 years already, for real, not potentially.
And what lies ahead? Deflation, never-ending crisis, Trump trade wars...
Folding International commerce into the domestic ecommerce unit won't help transparent reporting for sure.
Domestic commerce is stangnant yet extremely profitable. International commerce is growing fast but still unprofitable. Looks like a make-up operation.
thanks for commenting, there is always the stock, and there are business things, but yes, not great with BABA
They issue bonds to get offshore cash to buy back the shares. They can't use most of the onshore cash for share repurchases. So them issuing these bonds is actually good. BABA surged during the first Trump tenure. Tariffs can help BABA. Currently Xi doesn't have to stimulate the economy as the huge exports still give him the 5% GDP growth he is aming for. If tariffs hit Xi will stimulate internally and that is when BABA can take off. Also BABA's exports are very low. Why should they be hit by the tariffs.
@@TheScaryGermanGuy Thank you, that makes sense.
Such a terrible company to invest in
ah, when things get so big, hard to control!
@ they lied about their CO2 emissions many years ago and now they can’t compete in the EV market. It’s game over for this company, sorry to say.
@@RoTelnCheese for sure not. Volkswagen had several crises in the past, and they did overcome all of them.
Key point will be to reduce the labor cost, and that will happen, the one way, or the other.
Cars are still good, look at Audi, Porsche, Skoda ... or Lamborghini.
It is ridicolous that Ferrari sells 13700 cars in 2023 and is worth 80 billion Euros, while VW with selling 10 mio cars and owning Lamborghini (selling 10k cars in 2023) and much more is worth half of Ferrari.
But main point is that german state will not allow Volkswagen to go bankrupt. because everybody knows that this will be the end of german "Wohlstand" (prosperity), and nobody (except the greens) wants that ...
Also they are doing their homework concerning EV related stuff ...please don´t tell me that german engineers are not capable of doing the same what the chinese are doing ...
I am from Germany and I know that - if necessary - things are being done here - no matter what the capital market - momentarily - believes in.
And by the way: interest rates will go down (ECB), that will help Volkswagen refinancing their debt.
Too many car makers. Someone has to fold, bankrupt, go "out of business".